Report No. 70
Scope and Application and Rule of Damdupat
Section 2 and Proposed Section 2A
5.1. Section 2(a).-
The first part of section 2 deals with enactments mentioned in the schedule which are repealed. It does not have much practical importance. In the second part of the section, there is a saving not only in respect of certain enactments, but also in respect of certain incidents, rights and liabilities. Under clause (a), the provisions of any enactment not hereby expressly repealed are saved.
5.2. Section 2(b).-
Under clause (b), the section saves any terms or incidents of any contract or constitution of property which are consistent with the provisions of this Act and are allowed by the law for the time being in force. In practice, this clause assumes the greatest importance. In the very nature of things, its scope cannot be exhaustively indicated. However, by way of illustration, it may be stated that the right to partition of property is definitely saved by this clause. In addition, terms which can be imposed by a partition, being the terms of a "constitution of property", would also be. saved by this clause.
In its comment on this clause, the Select Committee observed1:-
"We have also saved all incidents of contracts not inconsistent with the provisions of the Bill. Besides the Malabar mortgagee's option which the Bill, as introduced, expressly preserved, there must be many other incidents of native contracts with which it is desirable not to interfere."
1. Report of the Select Committee (1878), para. 3.
5.3. Section 2(c).-
Clause (c) of section 2 saves rights and liabilities arising out of legal relations constituted before the Act came into force and reliefs in respect of any such rights or liabilities. This may have been considered necessary either because section 6 of the General Clauses Act, 1868, which was in force at the relevant time, was not considered comprehensive enough, or because the Transfer of Property Act was taken as affecting or abrogating not merely statutory rights but also others, for which the General Clauses Act could not have proved sufficient, the case not being one of "repeal" in regard to the sources of such rights.
5.4. Rights under rules of Hindu Law.-
In this connection, it may be of interest to note that the Hindu and Muslim law had a fairly well developed system of rules regulating the creation of mortgages, liens and pledges. Any rights which would have been created under such mortgages and pledges that were executed prior to the Act were not intended to be affected. Since there were certain points of difference between the present Act and Hindu and Muslim law as it was administered prior to the Act, such a saving was obviously necessary.
In Hindu law, for example, a mortgagor who had once mortgaged the property could not mortgage it to another, since such a conduct was regarded as criminal and worthy of punishment. Muslim law did not so penalise the mortgagor, but the purchaser after the mortgage could be compelled to redeem the property.
5.5. Prior to the Regulations of 1798, in Bengal and the United Provinces, and for a long time subsequently in the other provinces, the law administered was according to the personal laws of the Hindus and Muslims. These laws recognised no distinction between mortgages of land and pledges of movable property1. In both, the pledge might be for a period specified or not, and either usufructuary or simple possession was considered essential to its validity2, but it was by no means the invariable rule.
When no date was fixed by the parties for redemption, the mortgagor could redeem it at any distance of time from the mortgagee, who acquired no title as against him by prescription or possession, however long. Under the Muslim law, taking of interest was forbidden, but the property pledged was always presumed to be, in value, equivalent to the debt due3.
1. Cole, Dig., Vol. I, Ch. 3 Tit. 'Pledge'; Manu, Ch. VII, SS. 143-145; McNaghten's Mohammedan Law, p. 74, all cited by Gour.
2. See Lakshmandes v. Dasrat, ILR 6 Born 168 (FB); Sobhagchand v. Bhaichand, ILR 6 Born 490 (FB) reviewing and commenting on all the previous cases.
3. McNaghten's Mohammedan Law, p. 74.
5.6. Features of Hindu & Muslim mortgages.-
The salient features of the Hindu and Mohammedan mortgages have been thus described1 by Turner C.J.:-
"The form of Hindu mortgage under the names of Katkabala, Muddatakriyam, and Gahanlahan obtains commonly throughout British India, though its incidents may vary. It is generally, though not universally, accompanied by the delivery of possession to the mortgagee with permission to enjoy the usufruct either in lieu or part-payment of the interest.
Although there is no precise form of words necessary to constitute such a mortgage, it ordinarily differs from the bye-ul-wufa of the Mohammedans in this, that, in the Hindu form there is a preliminary mortgage with a condition for future sale, while in the Mohammedan form there is at once no absolute sale with a counter-agreement for re-sale which may be contained in the original sale-deed, or in a separate contemporaneous instrument. The origin and nature of this form of mortgage among "the Mohammedans is explained in Baillie's Mohammedan Law of Sale2.
It was introduced or adopted in order to defeat the precept of the Mohammedan Law prohibiting usury. The lender, by stipulating for the usufruct, or for the payment of a price on the re-sale higher than he paid, secured the same advantage as would have accrued to him from placing his money at interest, while the transaction in form did not violate the law."
The abrogation of all these rules by the Act was not a case of repeal of an "enactment". Hence the need for a widely-worded savings.
1. Ramasami v. Samiyappanayakan, ILR 4 Mad 179 (183).
2. Baillie's Mohammedan Law of Sale, p. 303.
5.7. Section 2(d).-
This takes us to section 2, clause (d), which saves transfers by operation of law or transfers by or in execution of a decree or order of a court of competent jurisdiction-except as provided by section 57 and chapter 4. Section 57 relates to sale by a Court. Chapter 4 relates to mortgages and charges. The intention is that mortgages and charges, even if created by operation of law, would be governed by the Act.
5.8. Section 2, last paragraph.-
The last paragraph of section 2 provides that nothing in the second chapter of the Act shall be deemed to affect any rule of Mohammedan Law. There was also a saving for Hindus and Buddhists, which has not been repealed. The saving regarding Hindus, it is stated, was inserted at the instance of Maharaja Jyotiandra Mohan Tagore1.
1. Gour Commentary on section 2.
5.9. Governments grants.-
This disposes of the savings expressly provided for. Let us now turn to a few other matters. It is to be noted that though there is no express savings in the Act as regards grants made by the Government, such grants are subject to a special law, namely, the Government Grants Act, 1895, which-to state the position in broad terms empowers the Government to make grants of property and to impose conditions which may not be otherwise valid under the Transfer of Property Act. In other words, in making such a grant, the Government has a wider discretion than an ordinary citizen and can burden the grant with conditions on the non-fulfilment of which the grant may be forfeited.